Australia’s housing market is immense and ever-growing, but it’s also more competitive than ever. Of the estimated 3.9 million owner-occupied mortgages across the country, 541,000 of them are in motion (opened or refinanced to a different bank) every year.
These customers, uncovered by Deloitte research in 2021, reveal the mortgage battlefield for banks.
We wanted to find out where these customers are coming from, where they go and, most importantly, why they leave and what they want from their new provider. As part of our research, we examined Australians who had either opened a new mortgage or switched their mortgage provider in the past three years, or were actively considering switching in the coming months.
The research offers detailed insights into how banks can defend market share and grow by attracting new customers. It’s also a crucial data set for Deloitte’s Acquisition.AI, a cutting-edge toolset which uses AI modelling and more than 4,000 data points including demographics, financial product holdings, household spend and lifestyle indicators, to help banks target their next best new customers.
On the move
The 541,000 mortgages in motion every year make up 13.7% of the estimated 3.9 million total owner-occupied mortgages in Australia. Over the past three years, 57% of these customers had switched their mortgage by moving home or refinancing (switchers), while 43% had opened a new mortgage account (openers).
Deloitte Acquisition.AI ‘Switchers Study Dec 2021’
What this means for customer acquisition
Our research shows high turnover among Australian mortgage holders. It sets a challenge for banks to consider how they can defend market share while attracting new customers. Key factors like account features and annual fees are driving customer churn – with at least one in three leaving due to something other than interest rates.
Banks have the opportunity to drive acquisition through direct channels, creating higher quality leads, moving the conversation away from brokers and winning more loyal customers. They can also start targeting the right customers among these 541,000 mortgages – those most relevant to their banking proposition. From lower account fees to a better digital experience, it’s the chance to talk to customers about what matters to them and responding with a targeted marketing strategy.